Crypto exchange Gemini has begun the process of reimbursing users of its now-closed lending program, Earn. According to a recent announcement, Gemini has paid out $2.18 billion in digital assets to Earn users as of May 29. This amount represents 97% of the assets owed to users, resulting in a 232% recovery following the suspension of withdrawals by Genesis, a former partner of the Earn program.
Asset Recovery Details
In a statement on social media platform X, Gemini explained, “If you had lent one Bitcoin in the Earn program, you will receive one Bitcoin back. You will also get any appreciation in your assets since you lent them into the Earn program.”
Settlement with Genesis
The distribution of funds follows a settlement reached with Genesis and other creditors during the bankruptcy process. Genesis Global, a crypto lender within the Digital Currency Group (DCG), filed for bankruptcy in January 2023 after halting withdrawals in November 2022 due to a liquidity crisis. A court recently approved Genesis to return $3 billion in cash and cryptocurrency to its creditors.
Gemini highlighted the success of the recovery, stating, “This represents an unprecedented recovery among crypto bankruptcies. We reached a settlement in principle with Genesis and other creditors, ensuring all Earn users will receive 100% of their digital assets back in kind.”
Legal Actions and Settlements Around Gemini Exchange
New York Attorney General Letitia James announced on May 20 that her office secured a $2-billion settlement with Genesis to address claims of investor fraud. This settlement requires Genesis to return funds to investors and cease operations in New York. Genesis has been accused of misleading investors who deposited over $1.1 billion through the Gemini Earn program.
Gemini emphasized that the Genesis bankruptcy was due to financial fraud and a lack of regulatory clarity, not issues inherent to cryptocurrency. Genesis was one of several crypto firms that filed for bankruptcy following the collapse of FTX in November 2022.
